shoes said:
one would imagine a fairly significant amount of revenue comes from fans attending games?
One of the problems in Seria A (Italy) has been borrowing on the back of
projected assets from this revenue source going over a decade into the future. I'm not sure whether this is as big a problem in this country, but the bottom line in football today is staffing costs.
The money today comes from all sorts of things, primarily television rights and club merchandise. This, of course, only applies to the big clubs - just as in the broader society, the gap between the rich and poor is vast and growing, hence the life-or-death rhetoric heard at the end of the season.
In Portsmouth's case the outstanding debt was huge and unsustainable, with a sacked manager's contracted severence settlement and amounts owed to the former owner being the proverbial straw. As reported in the current Private Eye;
"Among the outstanding issues from PFC's unsurprising collapse into administration is whether action will be taken to disqualify any of the directors for continuing to trade while insolvent.
With debts of
£70m, this must have been the case for weeks if not months, from when they stopped paying PAYE to the taxman."
As has already been said, folding football clubs could become a common occurance. Whether prosecutions of the directors of those clubs will be as common remains to be seen.
